We are using the model system Drosophila to study 1) how genomic DNA incorporated into transposon vectors influences the insertion site specificity of the transposon and 2) how regulatory DNA present within the transposon behaves at different chromosomal insertion sites 3) whether enhancer-trapping can be used to express a functional gene and rescue a mutant phenotype. We expect that these studies will have direct relavance to gene therapy regimens which rely on vectors which are incorporated into the genome. We have discovered a 2.6 kb fragment of DNA from the Drosophila segmentation gene engrailed (en) which has two remarkable activities: first, it promotes interactions between transposons located on homologous chromosomes and between flanking genomic regulatory DNA and regulatory sequences present in the transposon (the transvection or pairing-sensitive phenomenon) and second, it directs the insertion of P elements to particular regions of the Drosophila genome. We postulate that both of these phenomenon are mediated by proteins which can interact and bring together distant pieces of DNA. Our experiments are directed towards understanding these two phenomenon and isolating proteins which mediate them. Enhancer-trapping is the phenomenon whereby a transposon-encoded gene is regulated by enhancers which flank the transposon insertion site. The transposon-encoded gene is often regulated in a manner similar to the nearby flanking gene. We have used the engrailed fragment which causes selective insertion of transposons to insert a P-transposon which encodes a functional copy of the engrailed gene onto an engrailed mutant chromosome. We have shown that the transposon-encoded gene can rescue the engrailed mutant phenotype. This is the first demonstration that enhancer-trapping can be used to express a gene in a precise enough manner to rescue a mutant phenotype. This approach may be useful for gene therapy regimens of the future when precise regulation of the therapeutic gene is desired.